4. RESEARCH RESULTS
4.2 Company B: Managing uncertainties with frequent portfolio steering . 69
4.2.2 Company B’s innovation portfolios and key stakeholders
Although innovation project portfolio is not a term commonly used at Company B, inno-vation projects are managed in a coordinated way to reach the strategic objectives of the company. Company B manages two innovation project portfolios, where the first one focuses on hardware research and development, and the second one on software solu-tions. These two innovation project portfolios are tightly linked together due to similar strategic objectives. Developing cutting edge heavy machinery with innovative software solutions therefore requires close collaboration between the stakeholders related these portfolios.
Structure and key actors of the innovation project portfolios
The two innovation project portfolios at Company B are illustrated in figure 8 below. As mentioned, innovation project portfolio 1 is mainly focused on the hardware side of the heavy machinery, whereas innovation project portfolio 2 on the other hand focuses on the software solutions.
Innovation project portfolio structures and key actors at Company B
Innovation project portfolio 1 consists of three main sectors, where all sectors have their own yearly budget but otherwise share the same limited resources. At the high level, the innovation project portfolio 1 is managed by the director of R&D, and each sector has its own designed manager responsible for the given sub-area. Due to accounting related reasons, the projects within the portfolio are also divided into two categories: producti-zation and research projects. Research projects do not necessarily lead to new products due to higher uncertainties related to the innovation activities, whereas productization projects should result into the product being launched to the market after successful im-plementation.
Sector 1 is related to new product development and includes all basic machinery as well as some software and IT products. This sector consists of approximately twenty projects.
The second sector, called continuous improvement, relates to incremental development of the product offering based on the feedback given by the customers. Last year, for
example, over 700 changes were made to the machinery based on this feedback, ex-cluding software improvements. The third sector involves research and technology, in-cluding patenting and product safety, and approximately twenty projects fall under this area. Within this sector, Company B also collaborates closely with external stakeholders such as universities and other research institutes.
Innovation project portfolio 2 has not been specifically divided into different sectors. Typ-ically, it has approximately 10 on-going projects, with four to five larger projects lasting for couple of years and some smaller ones. The projects usually involve five to ten des-ignated project members and often a few other employees helping out with a certain phase of the project. This portfolio is managed by a designated R&D manager, who also acts as a project manager in some ongoing projects. All projects within the portfolio fall under the same yearly budget and share the same limited resources.
Portfolio stakeholders
Multiple external and internal stakeholders influence or are influenced by the innovation project portfolios at Company B. All relevant stakeholders for the innovation project port-folios are listed in table 13. Both the R&D business unit and the software development team are the key actors in practicing innovation project portfolio management. In addi-tion, the product management is an important stakeholder mentioned in all interviews, including product managers, engineering managers and local product boards. Same ap-plies to the sales team, as these actors are seen as a valuable source of information related to changing customer needs.
Due to the expertise needed in the innovation projects, mechanical and electrical engi-neers, software developers and testing and prototype team members are important stakeholders for the portfolios. As Company B manufactures a large proportion of their product offering in their own facilities, factories are also an important stakeholder in terms of research and development. As one of the interviewees explains:
“– – we have to come to an agreement with the factory on whether or not it is possible to develop a certain thing and if we have the implementation capacity for this, innovation for example.” – I8
Table 13. Key stakeholders at Company B
Stakeholders R&D • Director, R&D
• Manager, Technology
• Team members, R&D managers Software
develop-ment • R&D Manager
• Team members Product management • Product managers
• Engineering managers
• Local product boards Sales team • Sales director
• Director, dealer development
• Salespersons
Top management • Chief executive officer, CEO
• Other executive team members Middle management • Business line managers
• Team leads
Board of directors • Chairman of the board
• Other board members
Steering boards • Product council and local product boards
• Technology board
• Roadmap steering group
• Software steering group
• Project steering groups
Others • Mechanical and electrical engineers, software developers, testing and prototype team members
• Factories and production
• Suppliers
• Customers
• Competitors
• Universities and other research institutes
• Legal figures
• Technology forums
At Company B, various external stakeholders are also apparent in the interview data.
Especially customers, competitors and different research institutes are seen as important stakeholders, as well as legal figures due to the active patenting of new innovations and product safety regulations. In addition, some interviewees highlight the importance of
close collaboration with the component suppliers and see them as highly relevant stake-holders for the innovation project portfolios.
Different stakeholders interact with the innovation project portfolios mainly through vari-ous steering boards. These steering groups and their typical participants are listed in table 14, where the stakeholder acting as the chairman is bolded. One of the key steering boards at Company B is product council, which holds the highest decision-making power related to new product development. The director of R&D acts as the chairman, and other participants include the whole executive team excluding the human resources di-rector and the chief financial officer. The product council meets every other month.
Technology board on the other hand does not include top management. In this forum, the manager of technology acts as the chairman. The R&D manager responsible for software development also participates in these meetings, as well as engineering man-agers and other representatives from the product management. Additionally, a roadmap steering group gathers once a year to update the technology roadmap. According to one of the interviewees, these meetings include quite an extensive group of people. Partici-pants typically incorporate all product managers, the director of R&D and other managers including the manager of technology.
The software unit has its own steering group. These steering meetings are organized approximately once a month and a designated product manager acts as the chairman.
In addition, the strategic planning on the high level is done on yearly basis, including the top management, product managers, project managers and various team leads.
Company B also organizes project steering groups. In terms of software development, such project steering groups are only established for larger projects with more than five team members. The project steering groups typically include a product manager repre-senting the business line, R&D managers from the product development and the corre-sponding project manager. In addition, the project teams meet on weekly or daily basis to allocate topical tasks.
Table 14. Steering boards at Company B
Group Typical participants
Product council • Top management
o Chief executive officer, CEO
o Other relevant executive team members
• R&D
o Director, R&D
o Manager, Technology when invited separately
• Other stakeholders
• Software research and development o R&D manager
• Product management
o Engineering managers
o Representatives from the product management Roadmap
• Software research and development o R&D manager
• Top management
o Relevant executive team members
• Middle management
o Business line managers o Team leads
o Product manager Project
steering groups • Research and development o Project manager o R&D managers
• Product management o Product manager
The stakeholders and steering groups described above engage in innovation project portfolio uncertainty management in different ways. The key actors and their correspond-ing roles and responsibilities in terms of portfolio uncertainty management are described in further detail in the following chapter.